Risk sentiment was upbeat in currency markets on Wednesday, as signs of progress towards a COVID-19 vaccine and a Wall Street equities rebound on Tuesday pushed commodity currencies higher and the dollar to a one-month low.

Moderna Inc’s experimental vaccine for COVID-19 provoked immune responses in all 45 healthy volunteers in an ongoing early-stage study in the United States.

Global equities gained following on from a Wall Street rebound on Tuesday, with the optimism continuing through the Asian session, although Chinese shares sold off somewhat.

European equities were set to continue the bullish trend.

Hopes that European Union leaders will reach an agreement about the proposed coronavirus recovery fund at the EU summit on Friday and Saturday saw the euro rise to a four-month high of $1.14230 around 0010 GMT.

The euro extended gains and hit a four-month high of $1.1435 at 0744 GMT.

U.S. President Donald Trump ended Hong Kong’s preferential status as a trading partner. China responded by saying it will impose retaliatory sanctions on the United States.

The dollar index fell in the early hours of the morning, hitting a one-month low of 96.032 at 0735 GMT.

Source : Reuters